Observations on politics, news, culture and humor

BP spill bonanza!

Did you watch Obama read from a teleprompter at 8 PM EST last night? If you were smart like me and skipped it, his full remarks are here. More coverage after the jump.

Like most presidential speeches, it’s short on details and long on sound bites. Obama didn’t address the chronic underestimating of the rate of leakage. There was talk about the damage it’s done to the local economy and also talk about his hopes for a less petroleum-dependent future for America. He announced a new chief at the Minerals Management Service, but sounds like he is keeping Ken Salazar at Interior. He still seems to believe in the cleanup efforts BP has going on now as well as the relief well scheduled to be completed later this summer.

The part that most confused me:

I make that commitment tonight. Earlier, I asked Ray Mabus, the Secretary of the Navy, who is also a former governor of Mississippi and a son of the Gulf Coast, to develop a long-term Gulf Coast Restoration Plan as soon as possible. The plan will be designed by states, local communities, tribes, fishermen, businesses, conservationists and other Gulf residents. And BP will pay for the impact this spill has had on the region.

We had heard some sort of recovery bill for the Gulf was in the works and now we have confirmation of it. But we have two competing things at work in this paragraph: a. a Gulf Coast Restoration Plan, and b. Obama’s assurance that BP will pay for the impact of the spill. Is it fair to assume that the Gulf Coast Restoration Plan will be equal in cost to the “impact of the spill?” I am horrified by the way fishermen may well lose their livelihoods to this spill, but I want to make very sure that BP pays for every dime of the damage they have caused instead of being helped to pay the bill by American taxpayers.

Now, onto other coverage of the spill today.

-NYT reports that the rate of leakage has been underestimated all along and things are worse than we were led to believe (equivalent to an Exxon Valdez every four days? Yeesh!)

Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But what if the leak is so vast that the driller doesn’t have the resources to pay? The libertarian would respond that the driller should have been forced to post a bond or pay for sufficient insurance to cover any conceivable spill. Perhaps, but then the government needs to regulate the insurance contract and the resources of the insurer. Even more problematically, the libertarian’s solution requires us to place great trust in part of the public sector: the court system. At times, judges have been bribed; any courtroom can be influenced by the best lawyers that money can buy.

Hmm, so let’s see, we shouldn’t trust the tort system to be fairly played out in the courts because of bribery and high-priced lawyers, but we should trust in regulations which are written by friends of industry and maybe even industry itself and can often be worked around if you make the right campaign donations or hire smart, high-priced attorneys.

That doesn’t hold much water in my view.

Also, courts don’t have to be part of the public sector; Hans-Hermann Hoppe and others have written extensively about private court systems adjudicating disputes.

-Ronald Bailey at Reason gives at least part of the libertarian solution, discussing liability. SPOILER: the solution to liability is not to write more legislation like the Oil Pollution Act of 1990 which capped liabilities for “damage to natural resources and economic losses suffered by private parties resulting from offshore drilling spills” at $75 million.